Unleashing Digital Economy in India

  • IASbaba
  • September 18, 2020
  • 0
UPSC Articles
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Topic: General Studies 2:

  • Issues relating to development and management of health
  • e-governance- applications, models, successes, limitations, and potential

Unleashing Digital Economy in India

Six Regulators:

Digital businesses in India are staring at the prospect of control by no less than six regulators

  • An expert committee on non-personal data (NPD) has suggested the creation of an NPD Authority. It will be a supervisory body that will enable data sharing and enforce data requests. 
  • A recently notified Central Consumer Protection Authority (CCPA) would grant it oversight of digital businesses.
  • A regulator for personal data as well as e-commerce has been proposed. 
  • The Competition Commission of India (CCI) and The Telecom Regulatory Authority of India (TRAI) as a future licensor of digital applications already exist.

Fast moving technology and not-so agile governance frameworks:

Technology has catalysed fundamental changes over the last decade, resulting in new digital channels of creative expression, communication and knowledge formation. These developments have made it important to have new governance frameworks to guide transitions and respond to market failures. 

Digital businesses innovate to compete and survive, and consequently their functions and capabilities change rapidly. 

Conventional governance frameworks are not agile enough to keep up.

Confused policymaking:

India lacks a unified and cogent strategy to govern the transformational potential of digital markets, and this has resulted in confused policymaking. 

  • The proposed NPD Authority is expected to supervise data-sharing arrangements between businesses and government.
    A similar provision in the Personal Data Protection Bill, 2019 empowers the regulator to provide data. The e-commerce regulator proposed under the recent draft e-commerce policy also has similar powers.
  • Jurisdictional overlaps: The CCPA will oversee misleading advertisements online, as well as the disclosure of personal information to third parties. The draft of the National E-Commerce Policy proposes similar measures. 
  • Rules that demarcate supervisory boundaries of government departments also remain ambiguous.
    Example- The department for promotion of industry and internal trade is entrusted with all matters related to e-commerce.
    However, the administration of the Information Technology Act, 2000, which provides legal recognition to e-commerce, rests with the ministry of electronics and information technology.

If jurisdictional confusion persists, disputes are likely to follow. Such disputes are problematic because they erode economic value and trust in the supervisory capacity of the state. 

Way forward:

India requires a “whole of government” approach to rule-making to address institutional challenges raised by technology. 

  • The Economic Survey of 2018-19, noted that “reducing economic policy uncertainty is critical because both domestic investment and foreign investment are strongly deterred by increases in domestic economic policy uncertainty”. 
  • Increased dialogue and coherence among government bodies.
  • Multi-stakeholder consultations and the promotion of self-regulation by the industry are equally necessary for light-touch governance that incentivizes innovation. 
  • Good practices like regulatory impact assessments and international cooperation to address the cross-border dimensions of technology. 
  • India must avoid creating any constraints on private investment and chart a clear path for a trillion- dollar digital economy.
  • The accountability of new institutions is critical to improve the quality of regulation. 


Improving governance around regulation of the digital economy is a stepping stone on the country’s journey to becoming a digital superpower and should be worked upon.

Connecting the dots:

  • India lacks a unified and cogent strategy to govern the transformational potential of digital markets, and this has resulted in confused policymaking. Comment.

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